GCC economies might be over the worst effects of the oil price crash which began in 2014, said Samy Chaar, the chief economist at the Swiss private bank Lombard Odier.
Still, he said, countries in the region shouldn’t rest on their laurels and must continue to forge ahead with diversifying their economies to make them less reliant on oil even after the price of oil almost doubled from last year’s multi-year low.
The economist said it was unlikely that oil would be shooting back up to the days before the collapse in oil prices, when it averaged US$100 a barrel for several years before crashing to as low as $28 a barrel last year.
“I would say we’ve passed the trough – wherever, Russia, Brazil, 2016 was the trough and I think it was the same for the region,” he said. “It is a change of paradigm, things are not going to be as they were when commodity prices were much higher but it is still going to be an ambitious route ahead, a long painful road to economic prosperity.”
Indeed a painful patch of that road occurred late last week.
Giving back some of the gains made in the past 16 months, the price of Brent crude fell below $50 a barrel last week for the first time since late March. Since then, it has rebounded, rising 0.14 per cent to $50.84 a barrel on Friday.
Mr Chaar said the UAE and Kuwait were among the best positioned Arabian Gulf countries to rise to the challenge of an era of lower oil prices, because of their high cash reserves and low debt. All the countries in the region will, however, need to adapt to the new reality of lower oil prices and begin to implement taxes such as value added tax, he said.
Since the price of oil began its sharp descent in mid-2014, governments in the region have reduced energy subsidies, cut spending and raised debt in international markets to prevent deficits from spiralling.
Saudi Arabia said on Thursday that its first quarter deficit shrunk to 26.2 billion Saudi riyals (Dh25.65bn) amid higher energy prices compared to 91bn riyals in the same period last year.
At the same time, these countries have outlined ambitious plans to transform their oil-reliant economies with measures that include selling off some stakes in major state companies such as Saudi Arabia’s Aramco, the world’s largest oil producer.
Not everyone, however, thinks that the Gulf region is over the worst. The GCC is likely to experience lower economic growth in 2017 versus last year amid lacklustre oil prices and continued cuts in spending on government projects, according to a report last month by the Institute of Chartered Accountants in England and Wales (ICAEW) and Oxford Economics.
The authors of the report said that GDP growth was likely to slow to 1.1 per cent this year, the weakest since the global financial crisis of 2008, from 2 per cent in 2016.
Real GDP growth for GCC oil exporters is forecast at 0.9 per cent this year, down from 2 per cent last year and 3.8 per cent the year before, the IMF said in its latest economic forecast.
mkassem@thenational.ae
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SPECS
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The specs: 2018 Opel Mokka X
Price, as tested: Dh84,000
Engine: 1.4L, four-cylinder turbo
Transmission: Six-speed auto
Power: 142hp at 4,900rpm
Torque: 200Nm at 1,850rpm
Fuel economy, combined: 6.5L / 100km
The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
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The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
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Formula%204%20Italian%20Championship%202023%20calendar
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Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
The specs: 2018 Mitsubishi Eclipse Cross
Price, base / as tested: Dh101,140 / Dh113,800
Engine: Turbocharged 1.5-litre four-cylinder
Power: 148hp @ 5,500rpm
Torque: 250Nm @ 2,000rpm
Transmission: Eight-speed CVT
Fuel consumption, combined: 7.0L / 100km
Meydan race card
6.30pm: Baniyas (PA) Group 2 Dh125,000 (Dirt) 1,400m
7.05pm: Maiden (TB) Dh165,000 (D) 1,200m
7.40pm: Maiden (TB) Dh165,000 (D) 1,400m
8.15pm: Handicap (TB) Dh170,000 (D) 1,900m
8.50pm: Rated Conditions (TB) Dh240,000 (D) 1,600m
9.25pm: Handicap (TB) Dh175,000 (D)1,200m
10pm: Handicap (TB) Dh165,000 (D) 1,400m
The finalists
Player of the Century, 2001-2020: Cristiano Ronaldo (Juventus), Lionel Messi (Barcelona), Mohamed Salah (Liverpool), Ronaldinho
Coach of the Century, 2001-2020: Pep Guardiola (Manchester City), Jose Mourinho (Tottenham Hotspur), Zinedine Zidane (Real Madrid), Sir Alex Ferguson
Club of the Century, 2001-2020: Al Ahly (Egypt), Bayern Munich (Germany), Barcelona (Spain), Real Madrid (Spain)
Player of the Year: Cristiano Ronaldo, Lionel Messi, Robert Lewandowski (Bayern Munich)
Club of the Year: Bayern Munich, Liverpool, Real Madrid
Coach of the Year: Gian Piero Gasperini (Atalanta), Hans-Dieter Flick (Bayern Munich), Jurgen Klopp (Liverpool)
Agent of the Century, 2001-2020: Giovanni Branchini, Jorge Mendes, Mino Raiola
Mia Man’s tips for fermentation
- Start with a simple recipe such as yogurt or sauerkraut
- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.
- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.
- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
DMZ facts
- The DMZ was created as a buffer after the 1950-53 Korean War.
- It runs 248 kilometers across the Korean Peninsula and is 4km wide.
- The zone is jointly overseen by the US-led United Nations Command and North Korea.
- It is littered with an estimated 2 million mines, tank traps, razor wire fences and guard posts.
- Donald Trump and Kim Jong-Un met at a building in Panmunjom, where an armistice was signed to stop the Korean War.
- Panmunjom is 52km north of the Korean capital Seoul and 147km south of Pyongyang, North Korea’s capital.
- Former US president Bill Clinton visited Panmunjom in 1993, while Ronald Reagan visited the DMZ in 1983, George W. Bush in 2002 and Barack Obama visited a nearby military camp in 2012.
- Mr Trump planned to visit in November 2017, but heavy fog that prevented his helicopter from landing.
Expo details
Expo 2020 Dubai will be the first World Expo to be held in the Middle East, Africa and South Asia
The world fair will run for six months from October 20, 2020 to April 10, 2021.
It is expected to attract 25 million visits
Some 70 per cent visitors are projected to come from outside the UAE, the largest proportion of international visitors in the 167-year history of World Expos.
More than 30,000 volunteers are required for Expo 2020
The site covers a total of 4.38 sqkm, including a 2 sqkm gated area
It is located adjacent to Al Maktoum International Airport in Dubai South
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
A list of the animal rescue organisations in the UAE
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Museum of the Future in numbers
- 78 metres is the height of the museum
- 30,000 square metres is its total area
- 17,000 square metres is the length of the stainless steel facade
- 14 kilometres is the length of LED lights used on the facade
- 1,024 individual pieces make up the exterior
- 7 floors in all, with one for administrative offices
- 2,400 diagonally intersecting steel members frame the torus shape
- 100 species of trees and plants dot the gardens
- Dh145 is the price of a ticket
More from Neighbourhood Watch:
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
On sale: now
Zayed Sustainability Prize
Killing of Qassem Suleimani
One in nine do not have enough to eat
Created in 1961, the World Food Programme is pledged to fight hunger worldwide as well as providing emergency food assistance in a crisis.
One of the organisation’s goals is the Zero Hunger Pledge, adopted by the international community in 2015 as one of the 17 Sustainable Goals for Sustainable Development, to end world hunger by 2030.
The WFP, a branch of the United Nations, is funded by voluntary donations from governments, businesses and private donations.
Almost two thirds of its operations currently take place in conflict zones, where it is calculated that people are more than three times likely to suffer from malnutrition than in peaceful countries.
It is currently estimated that one in nine people globally do not have enough to eat.
On any one day, the WFP estimates that it has 5,000 lorries, 20 ships and 70 aircraft on the move.
Outside emergencies, the WFP provides school meals to up to 25 million children in 63 countries, while working with communities to improve nutrition. Where possible, it buys supplies from developing countries to cut down transport cost and boost local economies.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million